CAIRO: The eurozone saw a significant drop in manufacturing activity in July as weak demand, rising prices and global economic instability continue.
According to S&P Global’s final manufacturing Purchasing Managers’ Index, Japan’s manufacturing sector growth slowed down, while South Korea’s factory activity weakened for the first time in two years.
Russia's factory activity grew slightly, whereas India's factory growth hit an 8-month high last month.
Global July Factory Activity
Eurozone
- Manufacturing activity across the eurozone contracted last month with factories forced to stockpile unsold goods due to weak demand.
- Final manufacturing PMI fell to 49.8 in July from June’s 52.1, just ahead of a preliminary reading of 49.6.
- First time below the 50 mark, which separates growth from contraction, since June 2020.
UK
- British manufacturing output and new orders declined in July at the fastest rate since May 2020 as factories across Europe struggled with rising costs and slowing demand.
- Final manufacturing PMI fell last month to 52.1 from 52.8 in June.
- Revised down slightly from a preliminary “flash” July reading of 52.2.
Germany
- Germany’s manufacturing sector contracted in July for the first time in over two years, hurt by a deepening slump in new orders that darkens the outlook for Europe’s largest economy.
- Final manufacturing PMI fell to 49.3 from 52.0 in June.
- A Reuters poll of analysts had pointed to a July reading of 49.2.
France
- French manufacturing activity contracted in July by a bit more than initially forecast, highlighting the inflationary pressures on the euro zone’s second-biggest economy.
- Final manufacturing PMI fell to 49.5 points from 51.4 in June.
Italy
- Italy’s manufacturing sector contracted in July for the first time in more than two years, amid a sharp decline in factory production.
- Final manufacturing PMI came in at 48.5, down from 50.9 the month before.
- Below the 50 mark that separates growth from contraction for the first time since June 2020.
Spain
- Factory activity in Spain contracted in July for the first time in a year and a half as inflationary pressures and macroeconomic uncertainty weighed on demand.
- Manufacturing PMI fell to 48.7 in July, down from 52.6 in June.
- The indicator in June was below the 50.0 level that marks an activity contraction for the first time since January 2021 and the lowest since May 2020, when the country was in a strict lockdown.
Poland
- The downturn in Polish manufacturing accelerated in July, as output and new orders fell sharply due to an uncertain economic outlook and high inflation.
- Final manufacturing PMI fell to 42.1 in July from 44.4 in June, below the 50.0 line that separates growth from contraction.
- Analysts polled by Reuters had expected a reading of 43.6.
Russia
- Russia’s manufacturing sector held steady in July, as the sector continues to struggle with diving exports and logistical problems in the face of Western sanctions.
- Manufacturing PMI edged lower to 50.3 from 50.9 in June, but stayed above the 50 mark that separates expansion from contraction.
India
- India’s factory activity expanded at its quickest pace in eight months in July, driven by solid growth in new orders and output as demand continued to improve on the back of easing price pressures.
- The survey results suggested the Indian economy has remained resilient, at least for now, despite concerns over faster interest rate hikes, massive capital outflows, a weakening rupee and a rapidly slowing global economy.
- Final manufacturing PMI jumped to 56.4 in July from June’s 53.9, remaining above the 50-level separating growth from contraction for a thirteenth month.
South Korea
- South Korea’s factory activity shrank in July for the first time in nearly two years, as output and new orders weakened amid continued inflation and supply chain woes.
- The final manufacturing PMI fell to a seasonally-adjusted 49.8 in July from 51.3 in June, falling below 50 for the first time since September 2020.
Japan
- Japan’s manufacturing activity expanded at the weakest rate in 10 months in July, as pressure from rising prices and supply disruptions hurt output and new orders, suggesting a solid post-pandemic economic recovery is still some way off.
- The final manufacturing PMI dipped to a seasonally adjusted 52.1 in July from the previous month’s 52.7 final.
South Africa
- South African manufacturing activity contracted for the first time in a year in July, when the country experienced major power cuts that dented output.
- The seasonally-adjusted Absa PMI fell to 47.6 points in July from 52.2 in June, falling below the 50-point mark that separates expansion from contraction for the first time since July 2021.
